A study examined state initiatives for industry-based skill standards and credentials. Officials in 19 states were interviewed, case studies of programs in 3 states (Georgia, Pennsylvania, and Texas) were conducted, and focus group discussions were held with 25 individuals. State skill standards were generally found to be tied to broader efforts to reform the education system in general and vocational education in particular. The forces driving the development of standards and credentials varied by state; however, business and industry involvement proved critical in all states studied. The methodologies used to develop skill standards have drawn heavily on the DACUM (Developing a Curriculum) process and the work of the Vocational-Technical Education Consortium of States. Many states have already undertaken major initiatives to develop assessment processes, and many states are planning to implement statewide processes that would involve the use of performance-based assessments (including portfolios) together with traditional written tests. No state has yet developed a statewide credentialing process, and development efforts across states and at the national level have been fragmented. (A 10-item bibliography is provided. State-by-state phone survey results and the three case studies are appended along with a list of focus group participants.) (MN)